January 19, 2013 - February 1, 2013

Maryland Tax Credit Bill Aims to Spur Commercial Development

1/22/2013, Baltimore Business Journal, Gary Haber Commercial real estate developers would be able to claim a state income tax credit for their projects under a bill introduced in the General Assembly. The tax credit legislation comes at the same time that Gov. Martin O'Malley wants to launch a new $3 million tax credit for cyber security companies, and increase tax credits for biotech firms, research and development and Maryland's television and film industry. Under the legislation, developers of commercial projects would be able to claim a tax credit of up to $25,000 for five years. Click here for more...

Feverish Pace of MOB Development Fueled by Strong Demand, New Occupancy Trends
1/23/2013, CoStar Group, Randyl Drummer

The hot medical office building (MOB) market is likely to remain in at least a semi-feverish state as the transition of common medical procedures to outpatient clinics accelerates with full implementation of the Patient Protection & Affordable Care Act, fundamentally changing the nation's health-care delivery system. Health care was the largest job-creation sector in 2012, with most of the jobs added in ambulatory care facilities, a trend that will continue this year according to Jeffrey Cooper, executive managing director of Savills US. Continued health-care employment growth, combined with the expected increase in demand for medical care services from the aging population is expected to continue to drive development of medical ambulatory care facilities, including MOBs, surgery centers, urgent care clinics and diagnostic lab facilities. Click here for more...

Maryland Lawmakers Propose Corporate Income Tax Rate

1/25/2013, Baltimore Business Journal, Gary Haber

Lowering

Two state lawmakers from Frederick County want to lower Maryland's corporate income tax rate, saying it would make the state more competitive with neighboring Virginia. The bill would drop the rate on corporate income from 8.25 percent to 6 percent, the same as in Virginia. That would help Maryland compete better for jobs and corporate relocations with its southern neighbor, said Del. Kelly Schulz, R-Frederick County, who sponsored House Bill 261. The Maryland Chamber of Commerce backs lowering the corporate tax rate. A lower tax rate would help Maryland compete better with Virginia and North Carolina, which has a 6.9 percent corporate tax rate, the Chamber said on its website. A lower rate also would encourage companies already in Maryland to expand their hiring and operations in the state, the Chamber said. It is unclear how the proposed tax cut would affect state tax collections because a fiscal note has not yet been issued for either bill. Click here for more...

'Wall St.' Flees NY for Tax-Free Fla.

1/28/2013, The New York Post, Josh Margolin

The city's hedge-fund executives are flying south - and it's not for vacation. An increasing number of financial firms, especially private equity and hedge funds, are fed up with New York's sky-high city and state tax rates and are relocating to the business-friendly climate in Florida's Palm Beach County. And they're being welcomed with open arms - officials in Palm Beach recently opened an entire office dedicated to luring finance hot shots down south. But there's no state income tax in the Sunshine State. Compare that to New York, where the state and local governments took $14.71 of every $100 earned in 2010, according to state records. Click here for more...

When Good News for Real Estate is Bad

1/29/2013, The Wall Street Journal, Al Yoon A new worry is threatening the rally in the rebounding market for commercial mortgage-backed securities: Property owners have started to pick up the pace of resolving problems with distressed loans. That is bad news for bondholders who paid up to buy such securities on the assumption they would keep paying a high interest rate for a longer period. Until now, the biggest concern, as the market has rebounded, has been in the high delinquency rate. Many commercial properties still are suffering from high vacancy and low demand, and the resulting defaults have caused losses for some commercial-mortgage security investors. Click here for more...

US Economy Shifted into Reverse in Late 2012,

Partly Because of Sharp Gov't Spending Cuts

1/30/2013, Associated Press via The Washington Post The U.S. economy shrank unexpectedly late last year, a reminder of the biggest threat it faces in 2013: sharp government spending cuts and prolonged political budget fights. A plunge in defense spending helped push the economy into negative territory for the first time since mid-2009. The contraction in the OctoberDecember quarter came in at an annual rate of 0.1 percent, according to a government estimate released Wednesday. The likelihood of another recession appears remote. The economy is forecast to grow around 2 percent this year as strength in areas like housing and auto sales could partly offset government cutbacks. Investors appear unfazed, too: The stock market has surged more than 6 percent this year and is nearing an all-time high. But economists warn that further spending cuts would weaken a stillprecarious recovery. Click here for more...

Recovering Office Demand Sets Stage for Rent Growth Across the U.S.
1/30/2013, CoStar Group, Randyl Drummer

Tenant demand for office space ended 2012 on a strong note as occupancy gains spread across a broadening array of U.S. markets, opening the door for widespread rental rate increases this year, CoStar Group reported in the company's Year-End 2012 Office Review & Outlook. Nearly every U.S. office market enjoyed absorption gains in 2012, with the exception of a few markets with industry-specific or regional economic issues, such as Northern New Jersey, where the pharmaceutical business has been in contraction. With very limited new office construction save for medical office and health care related projects in various markets and a significant amount of older space claimed by the wrecking ball or converted to other uses such as multifamily or hotels, vacancy rates fell across the country in the fourth quarter.Click here for more...

Is the Refi 'Apocalypse' Really Upon Us?

1/30/2013, CNBC, Diana Olick

Mortgage rates today are very low, but U.S. borrowers have a very short memory. They forget that the rate on the 30-year fixed, which sits around 3.6 percent today, was a full percentage point higher a year ago, and above 5 percent in January of 2010. The purchasing power gained through today's low rates have arguably helped fuel the recovery in home sales. Low rates have also sparked a boom in mortgage refinancing, which in turn has put more spending money in consumers' pockets. Witness the 10 percent drop in refinance applications from a week ago, on the Mortgage Bankers Association's weekly report. The rate on the 30year fixed moved from 3.62 percent to 3.67 percent.

While the Federal Reserve does not set mortgage rates, a signal that the economic recovery is improving and even the slightest hint that the Fed could end its purchases of mortgage-backed securities, could push rates slightly higher. Click here for more...

Main Street Remains Pessimistic, Sees Little 2013 Hiring: Survey

1/31/2013, CNBC, Heesun Wee

While there's evidence suggesting the jobs market is slowly recovering, a large chunk of small-business owners remain pessimistic and expect the economy to remain stagnant or worsen in 2013, according to a new survey of 600 small firms. Most respondents also said they plan to trim costs, and 87 percent said they did not plan to hire additional employees. Top concerns for small businesses this year not surprisingly are taxes (70 percent, according to the survey), government regulation (50 percent) and the Affordable Care Act, also known as Obamacare (or 36 percent). Despite the gloom and doom, entrepreneurs do see growth opportunities in the e-commerce space, with nearly half of those surveyed expected to create a new e-commerce website. Small-business owners (52 percent of respondents) also see potential export opportunities in the BRIC countries - Brazil, Russia, India, and China. Click here for more... Click here to download a printable version

MacKenzie is committed to helping firms capture a competitive advantage through commercial real estate. We have a proven approach, a skilled, multi-disciplined team, and the in-depth local market knowledge necessary to succeed in Maryland's business environment. MacKenzie is a full-service commercial real estate company offering services in leasing and sales, construction, development, GIS and research, property management, and debt and equity placement. For more information, please contact: Meghan G. Roy 410.494.4846 Email Meghan Now

This newsletter is a summary of articles related to commercial real estate finance news in the Baltimore/Washington market, collected from local publications as noted above. Should you require specific information, please refer to the publication source or call one of our professionals at 410.821.8585. All information furnished regarding property for sale, rent, exchange or financing is from sources deemed reliable. No representation is made as to the accuracy thereof and all such information is submitted subject to errors, omissions, or changes in conditions, prior sale, lease or withdrawal without notice. All information should be verified to the satisfaction of the person relying thereon.